Junk Bonds Fuel the Shale Boom

Investors line up to buy debt from money-losing energy companies
Rice’s operations in Greene County, Pa. Courtesy Rice Energy

Rice Energy, a natural gas producer with a low credit rating, raised $900 million in a bond sale in April, $150 million more than it originally sought. Investors snapped up the bonds even though the Canonsburg (Pa.)-based company has lost money three years in a row, has drilled fewer than 50 wells (most named after superheroes and monster trucks), and said it will spend $4.09 for every dollar it earns (before interest, taxes, depreciation, and amortization) in 2014.

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